Second Rate Democracy

Seventeen Ways America is Less Democratic than other Major Western Countries and How We Can Do Better

A web project of Douglas J. Amy, Professor Emeritus of Politics, Mount Holyoke College

Seventeen Ways America is Less Democratic than other Major Western Countries and How We Can Do Better

A web project of Douglas J. Amy, Professor Emeritus of Politics, Mount Holyoke College

The Seventeen Issues: Congress > 1. Special Interest Lobbying

The Lobbying System:  How Monied Interests Get Their Way

In 2014, Benjamin Page and Martin Gilens released the results of a study they did on twenty years of policymaking in Congress.  They found that “the average citizen exerts little or no influence on federal government policy.” The chances of a policy passing Congress was basically unaffected by how many or how few of the public supported it.  The interests whose opinions did make a difference were the wealthier ones. “Policymaking,” they concluded, “is dominated by powerful business organizations and a small number of affluent Americans.”  And this imbalance of power, they argued, seriously threatened “America’s claim to being a democratic society.”

So how does this happen?  How can the wealthy and corporations so thoroughly dominate in our legislative system?  Much of the answer to this question is lobbying – the organized effort to sway the decisions of policymakers.  Lobbying  plays a major role in determining whose problems and concerns get the attention of Congress and whose arguments get a better hearing. Congress does not listen to average Americans because often their voice is drowned out by the relentless shouting of special interest lobbies. Lobbying can be an important form of political participation, but today our lobbying system is actually working to undermine democracy and to make the political system responsive to the few, not the many.  Importantly, the political systems of most other Western democracies are designed in a way that reduces the influence of wealthy lobbies.

Lobbying:  Too Often Ignored

Lobbying rarely gets the attention it deserves.  Congressional elections, on the other hand, are the subject of thousands upon thousands of hours of media reporting and endless numbers of blog and Facebook posts.  In contrast, the media rarely cover lobbying activities at all.  It is assumed that elections are what determine what Congress will do.  But in reality, the battle over Congressional policymaking really only heats up when the elections are over and Congress begins to meet. This is when the lobbyists get to work.

Contrary to popular image, the work of lobbyists involves much more than meeting with members of Congress, taking them out to dinner, etc.  Lobbyists also testify at key committee hearings, constantly meet with staff and provide them with information, and sometimes actually write the legislation itself.  And lobbyists are dedicated to playing the long game.  They may work for years to get one small provision inserted in an obscure bill – but that provision could mean millions of dollars in tax cuts for their clients or an exemption from a costly business regulation.

Lobbying is also important because it is so difficult to get things through Congress. As noted elsewhere on this website, our separation of powers system is prone to gridlock.  There are many veto points in the legislative process where a bill may be stalled or defeated.  So successful lobbying usually requires a long and sustained effort. It’s like trying to force open a very rusty door.  You need to push hard for a long time to get it to move enough so you can get through it.  And only the best organized and best funded lobbies are in a position to wage this kind of protracted campaign for a bill or a provision in a bill.

The propensity for gridlock in Congress actually gives well-funded lobbies two different advantages.  First, only these groups have the massive resources necessary to exert the constant pressure needed to overcome gridlock.  Second, the many veto points in the law-making process mean that it is easier to stop bills than to pass them.  In other words, it’s easier to play defense than offense.  And this often works to the advantage of wealthy interests.  These interests are already doing well, so they are most often interested in preserving the status quo, not changing things.  Think about the rich who do not want to have their taxes raised, or corporations that do not want to be regulated.  To stop an increase in taxes or regulation they only have to kill a bill in one subcommittee in either the House or Senate.  Or in a full committee.  Or in a floor vote in either body.  Or they can have the president veto it.  So they only have to win once.  But the road to victory for those who want to increase taxes or regulation is much harder – they have to win in every subcommittee, full committee, and each floor vote in both Houses and also convince a president not to veto the bill.  So often the lobbyists for wealthy interests have by far the less demanding job.

Undermining Democracy

Our lobbying system violates many of the basic attributes of a democracy – especially the principle of political equality. One could imagine a way that lobbying would fit well into a democratic system. If all interests had lobbies, and if those lobbies had a relatively equal chance of getting heard in the policymaking process that could help to make policymakers more responsive to the public.  And to be fair, most interests do in fact have a lobbying presence in Washington. These include business, unions, environmentalists, religious groups, the elderly, doctors, gun rights advocates, women’s groups, farmers, etc. The existence of all these lobbying groups can give the appearance of a fair and balanced competition between all interests. But as Lee Drutman explains, this is only an illusion – corporations are by far the dominant force in the lobbying system.

Something is out of balance in Washington. Corporations now spend about $2.6 billion a year on reported lobbying expenditures. Today, the biggest companies have upwards of 100 lobbyists representing them, allowing them to be everywhere, all the time. For every dollar spent on lobbying by labor unions and public-interest groups together, large corporations and their associations now spend $34. …One has to go back to the Gilded Age to find business in such a dominant political position in American politics.

That $2.6 billion figure is revealing.  It is thirteen times the amount corporations spend on PAC  contributions to campaigns.  This gives us a sense of how important lobbying is to business.  They are putting their money where they think it does the most good – the most return for their investment – into lobbying.  In 2017, for instance, FedEx spent $10 million lobbying Congress – much of it aimed at promoting a tax cut bill with provisions highly favorable to the company.  The very next year FedEx saved $1.6 billion in taxes. Not bad.

The Advantages of Money in Lobbying

The business community has learned that it could use its vast corporate resources to far outspend its rivals in Washington lobbying. Lots of money buys lots of advantages in lobbying. Let’s consider what those advantages are.

Environmental groups have roughly 300 lobbyists. But just five business groups who routinely oppose environmental legislation (energy, construction, agri-business, automobiles, and the chemical industry) are able to field almost 4,000 lobbyists.

  • More Lobbying Groups. The vast majority of organizations lobbying in Washington, D.C. are corporations. Of the top 100 lobbying organizations, 71 are corporations. Many corporations are also represented by industry and trade associations. Prudential, for example, contributes to 12 different trade associations that lobby on their behalf.  These business associations make up 23 of the top 100 lobbying organizations – bringing the overall business total to 94 out of 100. Only three lobbies for unions and public interest groups make the top 100.
  • More Lobbyists. Drutman’s figure of big companies having 100 lobbyists actually understates the level of corporate bias in numbers of lobbyists.  We need to look beyond individual companies and consider collections of companies in industries. Consider for example the pharmaceutical industry. Together they have 1,348 lobbyists – over two for every member of the House and Senate. Having lots of lobbyists means they can stay in constant contact with every member of Congress who has an important role in setting drug policies. To put this in perspective, one of a handful of groups working to keep drug prices down, Campaign for Sustainable Rx Pricing, has 14 lobbyists.
  • Larger Staffs and More Analysis. Support staff is crucial for effective lobbying. They are instrumental in producing the information, policy analysis, and reports that lobbyists use to persuade members of Congress that business friendly policies are in everyone’s interest. Most members of Congress are experts in only a few areas – like defense policy or agricultural policy. They end up depending on lobbyists to provide them with the information and analysis they need to make informed decisions in other policy areas. Lobbyists are only too happy to oblige – and wield influence in that way
  • Better Lobbyists. Effective lobbyists not only rely on persuasive information and analysis to influence legislation, they also need good personal relationships with members of Congress. The lobbyists best at doing this are those who used to serve in Congress themselves. Many retired representatives and senators become lobbyists, and end up working with members of Congress who were friends and colleagues. They know these people and they know how things work in Congress – giving them a leg up on other lobbyists. But these kinds of connections do not come cheap. Ex-members of Congress demand healthy fees that only the richest lobbying groups can afford.
  • More Campaign Contributions. Corporate lobbying groups do not themselves make campaign contributions, but the businesses who sponsor them do.  These donations are crucial for lobbyists because they open doors and give them access to these policymakers.  Members of Congress are extraordinarily busy and do not have time to see everyone knocking on their doors.  They often feel obligated to see lobbyists for organizations who donated heavily to their campaigns.  Studies show that which interests get access and how much time they get is often directly related to the size of their campaign contributions.  This kind of direct access is an important advantage for lobbyists. A face-to-face meeting with a policymaker allows lobbyists to be much more persuasive.

In reality, all lobbying organizations are not created equal, and the competition between them does not take place on a level playing field. Certain interests are able to unfairly dominate the lobbying process and exert much more influence over legislation. Again, as is so often the case in American politics, it is money that makes the difference.

Another Kind of Lobbying Inequality: Think Tanks

Think tanks also play a role in the lobbying processes.  These policy research institutions – like The Brookings Institution, The Heritage Foundation, and the American Enterprise Institute – produce books, articles, and reports that are sent to members of Congress and their staffs.  They also testify in congressional hearings.  Many produce huge policy handbooks that detail specific bills in a wide variety of areas that are then used as blueprints by policymakers in the legislative and administrative branches.  Harper’s magazine estimates that think tanks, lobbyists, and industry representatives actually wrote a minimum of 10,000 bills introduced in federal and state legislatures between 2010 and 2018.

Think tanks differ from traditional industry lobbies in two significant ways.  First, they aim their persuasive efforts not only at policymakers, but also the public – hoping that public opinion will help sway legislators to adopt the think tank’s political positions.  To this end, they produce volumes of op-ed pieces, articles, blog posts, and books – even fully written editorials aimed at small newspapers.  Several of them have their own video studios for making pieces that will be pitched to local newscasts and put up on the web.

Second, think tanks not only argue for and against specific pieces of legislation, but also engage in what could be called “ideological lobbying.”  They are promoting broad ideological points both to policymakers and the public.  Conservative and libertarian think-tanks, for example, produce materials that deify the market and demonize government.  So they not only argue against specific business regulations, but also against regulation in general – arguing that it undermines the natural efficiency of markets. And they maintain that not only are specific taxes undesirable, but that taxes in general are bad because they essentially steal the hard-earned money of people and corporations.  Think tanks often see it as their mission to shift the broad ideological orientation of Congress. If government regulation can be delegitimized in general, it makes it easier to defeat specific regulatory proposals.

Many of these think tanks merely serve as ways to add a patina of legitimacy to policies promoted by special interests – especially big business.

The influence of think tanks in the legislative process is partly a function of their image as quasi-academic institutions that can offer policymakers independent and unbiased policy analysis.   But in fact, many of these “policy idea factories” merely serve as ways to add a patina of legitimacy to policies being promoted by special interests – especially big business. As Eric Lipman and Brooke Williams explained in a New York Times article, “How Think Tanks Amplify Corporate America’s Influence;

Think tanks, which position themselves as “universities without students,” have power in government policy debates because they are seen as researchers independent of moneyed interests. But in the chase for funds, think tanks are pushing agendas important to corporate donors, at times blurring the line between researchers and lobbyists.

Of course there are many different kinds of think tanks – ranging across the entire political spectrum and including liberal and progressive ones. But as with lobbying groups, not all think tanks are born equal, and some are much better funded and more influential than others. For example, right-wing think tanks have four times the budget of left-wing think tanks. And there are twice the number of conservative think tanks as liberal ones. This political bias is hardly surprising considering that the interests who are in the best position to give large monetary gifts to think tanks.  One major source of funding is super-wealthy individuals who set up charitable foundations to funnel funds to these research groups. For example, the Koch brothers’ foundations fund many of the most influential conservative think tanks, the American Enterprise Institute, the Heritage Foundation, the Cato Foundation, the Manhattan Institute, and the Woodrow Wilson Center. Foundations affiliated with the Mellon banking heir Richard Mellon Scaife have bank-rolled AEI, Heritage, The Hoover Institution, the Manhattan Institute, the Center for Strategic and International Studies, and the Cato Institute.

The other major donors are businesses seeking to influence government policy.  And these corporate donors do expect to get something for their millions of dollars of donations.  Sometimes they get a seat on the board of the think tank.  Often, As Lipman and Williams found, companies making large donations can also enjoy some influence over the reports being produced.

The likely conclusions of some think tank reports, documents show, are discussed with donors — or even potential ones — before the research is complete. Drafts of the studies have been shared with donors whose opinions have then helped shape final reports. Donors have outlined how the resulting scholarship will be used as part of broader lobbying efforts. The think tanks also help donors promote their corporate brands, as Brookings does with JPMorgan Chase, whose $15.5 million contribution is the largest by a private corporation in the institution’s history.

Not content to just fund these think tanks, corporations also sometimes pay fees directly to think tank scholars.  Lipman and Williams’ examination of 75 think tanks “identified dozens of examples of scholars conducting research at think tanks while corporations were paying them to help shape government policy.” And, they observe, “even members of Congress say they are frequently unaware of the financial ties between industries and the witnesses with think tank titles appearing before them at hearings.”

What difference can think tanks make? Global warming policy is a good example. Think tanks have played a key role in the successful corporate dis-information campaigns on this issue – producing a raft of reports, analyses, op-ed pieces, and testimony intended to convince policymakers and the public that global warming is not a threat. This is hardly surprising, given the key role that businesses – especially Big Energy – play in funding these organizations.  Traditional energy companies contribute heavily to many of the largest think-tanks. Almost two-thirds of the top twenty-five think tanks are taking money from at least one oil company, and ExxonMobil helps fund more than half of them. And top executives from companies like ExxonMobil, Duke Energy, and Koch Industries are sitting on the boards of directors of the American Enterprise Institute, the Brookings Institution, the Center for Strategic and International Studies, the Cato Institute, and the Aspen Institute.

Generally speaking, think tanks give wealthy political interests a second bite at the lobbying pie.  And it allows corporations to conceal their self-serving policies in the cloak of intellectual legitimacy that comes with think tanks.  And like the traditional lobbying system, the think tank system violates basic democratic principles.  It denies equal power to average Americans and often works to undermine their interests and values in the policymaking process.

The Result: Policies for the Well-Off

Not surprisingly, since the process of lobbying is blatantly unequal and unfair, the results tend to be that way too.  Particularly revealing examples of this can be found in the area of tax law. Given the overwhelming advantage that the business community has in the lobbying process, it is hardly surprising that the federal taxes paid by businesses have also steadily declined over the last 60 years. Since the 1950s, the share of federal revenue brought in by the corporate income tax has plummeted from 26.6 percent to 6.1 percent. That is a very good return on the money business has invested in lobbying. Unfortunately, when businesses do not pay their fair share of taxes, this puts more of the tax burden on the public. Since the 1950s, the share of federal revenue brought in by workers’ payroll taxes rose steeply from 5.7 percent to 35.2 percent. Effectively, corporate lobbying has shifted the tax burden from those more able to pay to those less able.

Since the 1950s, the share of federal revenue brought in by the corporate income tax has plummeted from 26.6% to 6.1%.

Tax bills are a favorite target for lobbyists representing corporations and the wealthy for several reasons.  First, there is an enormous amount of money at stake. Second, these bills usually have hundreds and hundreds of pages of esoteric legalese and mind-numbing detail.  This means that most of their specific content gets little attention from the public and the press – and sometimes not even from the politicians voting on these laws.  And all these pages mean there are plenty of obscure places to insert loopholes, exceptions, and special provisions to benefit their well-off clients.  Tax law lobbyists can be confident in going about their business largely unnoticed and unchallenged.

Here are two classic examples of what we get from all this lobbying – taken from the 2017 tax cuts championed by President Trump and the Republicans. Hefty tax breaks were given to investment in so-called “opportunity zones” with the ostensible goal of creating more jobs in low-income areas.  However, much of the tax breaks went to investors in luxury hotels and high-end apartment buildings – few of which create many jobs. The main beneficiaries have been a handful of hedge funds and wealthy real estate developers, including Donald Trump’s son-in-law Jared Kushner. A similar scam in the same law was a tax cut provision supposedly intended to help small businesses.  But as the economist Paul Krugman pointed out, “Rich people with smart accountants don’t have a hard time pretending to be small-business owners.”  And so, not surprisingly, 61% of these tax benefits have gone into the wallets of the top 1% of households.

Let’s be clear about what is going on in these cases. It is not clever monied interests taking unfair advantage of well-crafted laws actually intended to benefit average Americans.  It is clever monied interests hiring hordes of lobbyists to push for provisions in these laws that will allow them to profit handsomely from these tax breaks. As Krugman has pointed out, much of the 2017 tax cut bill was actually drafted by the lobbyists representing the wealthy interests who ended up benefiting from that law.

The political bias in lobbying toward corporations and the rich has other policy effects as well.  It is one reason why the United States has not passed a major environmental protection bill in several decades.  Environmental interests are simply outgunned on the Hill. Consider this: according to OpenSecrets.org, environmental groups have roughly 300 lobbyists working for them. But just five business groups who routinely oppose environmental legislation (energy and natural resources, construction, agri-business, automobiles, and the chemical industry) are able to field almost 4,000 lobbyists.  And in 2018, these businesses contributed about 35 times more in political action committee donations to members of Congress ($229 million) than environmental groups ($6.6 million).

Our lack of action on global warming is a good example of what this means in terms of policy. Although the U.S. is one of the major contributors to global warming, we are doing much less than many other industrialized countries to address this problem. Consider the defeat of the last major climate warming bill in Congress in 2010. The lobbying was absurdly lopsided. Let’s simply consider the role of the energy industry.  Alternative energy interests who were supporting the bill were able to field a contingent of 138 lobbyists – which may sound like a lot.  But electrical utilities and the oil and coal industries, who opposed the bill, flooded Congress with an army of 2,810 lobbyists – that is four lobbyists for every member of Congress.

These are just a few examples of the questionable policies that result when the lobbying system is undemocratic and skewed in favor of well-to-do interests.  Other examples could easily be found in the areas like poverty policy, workplace safety, consumer protection, financial industry regulation, labor policy, food safety, etc.  We have a lobbying system in which the public interest is routinely sacrificed in favor of the interests of the well-off in our society.

How Other Democracies Do It Better

Most European democracies rely much more on public financing. This restricts one of the main calling cards – private donations – that American lobbyists use to get access and influence.

Generally, other major democratic countries do not have the same kind of lobbying problem that we have in the U.S.  Our political system has two unique aspects that worsen this problem.  First, we rely primarily on private campaign donations. Most European democracies rely much more on public financing. This restricts one of the main calling cards – private donations – that American lobbyists use to get access and influence.

Second, we have very little “party discipline” in Congress – which means that individual legislators are free to vote any way they want on bills.  This makes them juicy targets for expensive lobbying efforts. Most other major democracies have parliamentary systems with lots of party discipline.  Members of parliament are expected to vote with their party, and risk being kicked out of the party if they vote with the opposition.  So it makes little sense for lobbyists to spend a lot of time trying to sway the votes of individual legislators.  Now this does not eliminate lobbying, but it means that lobbyists must focus their efforts on trying to sway the party and party leadership – not lone legislators – which makes their job much tougher.

Also, many other advanced democracies have institutional arrangements which enable all major interest groups to make their views known in the policymaking process, irrespective of their monetary resources.  For example, many countries make extensive use of advisory commissions or “commissions of inquiry” to research and suggests legislation to parliament in particularly complex policy areas.  A commission on global warming policy, for instance, might include representatives from business, environmental groups, labor, and other stakeholders, along with experts in this area.  This gives more groups an opportunity for more equitable access to the lawmaking process. Some countries, like New Zealand, reserve these ad hoc commissions for only the most difficult issues, while others, like Sweden, create dozens of them every year.

Many European countries have also created so-called tripartite bargaining groups, primarily in the area of economic policies.  These groups are created by the government and include representatives of national business groups, labor organizations, and federal officials who negotiate national agreements over such issues as wage levels, benefits, work hours, worker safety, and so on.  In contrast to the U.S., where business has much more lobbying power than labor, these tripartite groups give labor an equal say in the process.

Because monied lobbies play a less dominant role in most other developed democracies, these countries have been more able to pass legislation that represents the interests of average citizens and is much less friendly to corporate and wealthy interests.  They have higher minimum wages, more union-friendly laws, universal medical care, stronger environmental regulations, better workplace safety laws, and more generous social welfare programs. If the U.S. could reduce the influence of wealthy lobbying interests, this holds out the hope that we too could pass more policies that benefit Main Street, not Wall Street.

Solutions for the United States

The U.S. is not going to become a parliamentary democracy with strict party discipline – so that option is out.  But there are things we can borrow from other advanced democracies that could help ameliorate our lobbying problem.  Most importantly, we could adopt public financing of campaigns. This would reduce the advantage that well-funded lobbies have in getting access to lawmakers.  We could also greatly benefit from relying more on advisory commissions than think tanks to formulate policy goals and prepare legislation. This approach would help ensure that all relevant interests are able to participate in this process.

It is worth noting that some reforms have already been made in the lobbying process in the U.S. Unfortunately they have been generally weak and ineffective.  For example, it is now illegal for lobbyists to ply members of Congress with free meals at expensive restaurants, tickets to sports events, etc.  But while these kinds of “bribes” fit into the public’s conception of how lobbying works, they never were an essential part of the process. Legislation has also been passed that requires senators to wait two years before they can lobby Congress after they retire, and forces retiring congressional staff members to wait one year after retirement to start lobbying their former office or committee.  But these slight delays have done little to impede the “revolving door” between Congress and the lobbying business

Some promising proposals have been made that could have a bigger impact on this problem.  Zephyr Teachout has argued, for instance, that the federal government should create an Office of Public Lobbying, which would have a staff of public lobbyists who would represent different public interest clients – such as consumers or environmentalists – in the policymaking process.  Congressional staffers who leave their jobs could find this a very attractive alternative to going to work for the corporate lobbying industry.  A sufficiently large corps of public lobbyists could help to even out the playing field at least somewhat.

Lee Drutman has argued for legislation that would make lobbying much more transparent.  As he points out, “organizations lobbying do not have to disclose which offices they visited, nor do they have to disclose the position for which they advocated or the draft legislation they left behind.”  But we could require them to submit a public report within 48 hours summarizing the meeting, who attended, and what was being advocated for.  This would make it more difficult for monied interests to write their own bills and to secretly lobby for narrow provisions in bills that now often go unnoticed.

Finally, as seen earlier, information and analysis are the coin of the realm is lobbying, and monied interests have the advantage of producing  and utilizing more of it. We could undermine that advantage by giving Congress the ability to generate more of its own analysis of key issues. This could be done by expanding the staffs of members of Congress. And if we improved the working conditions of staff (reducing their work hours to a reasonable number, for instance) and improved their pay, this would help to attract more talented people to these jobs.  More staff could also be hired for the congressional offices like the Government Accountability Office and the Congressional Research Service, who could become an even more important source of independent expertise on policy issues.  The more Congress can produce its own analysis, the less it will be dependent on outside lobbying groups.

Chances for Reform: Some Potential for Change

None of the potential solutions mentioned above are on the political agenda right now.  Public financing has been adopted in a few states, but most politicians, many special interests, and the conservative Supreme Court oppose it.  There is some public support for this kind of campaign finance reform, but it would have to grow considerably for this reform to become a reality.

On the positive side, most Americans do understand that Congress is in the thrall of special interests:  70% feel that average Americans have too little influence in government, 81% think wealthy people have too much influence, and 78% think large businesses have too much power.  But in the past many people seemed to blame “corrupt” politicians for these problems, and there seemed to be little public awareness of the crucial role that the lobbying system plays in frustrating citizen control over government.  But that may be changing now.  Some Democrats in Congress, along with progressive groups like the Center for American Progress and RepresentUs, have tried to highlight the problems of the lobbying system and propose some solutions. One proposed bill would extend the revolving door bans between Congress and lobbying to five years.  And such a ban is supported by 75% of Americans, including 77% of Republicans and 71% of Democrats. And it is heartening that 49% of voters support Senator Elizabeth Warren’s proposal for a tax that is meant to limit corporations from spending more than $500,000 yearly on lobbying.  But it is also clear that this proposal is very vulnerable to a Constitution challenge, given the First Amendment’s clear guarantee of the right to “petition government.”

So there seems to be some movement toward addressing the serious political problems caused by lobbying in the United States. However, it will take a great deal more organized public pressure to make even the weakest reforms a reality. So it looks like we are stuck for the time being with an unfair and unequal lobbying system that will continue to make American government less democratic and less responsive to the public than the governments in our peer democracies.

read the next issue: 2. Unrepresentative Senate


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